International development and co-operation policies try to achieve two goals simultaneously: poverty alleviation and democratization. Using a rational choice approach to non-democratic regimes, this paper argues that there is a trade-off between these two goals whenever western development policies are applied to, or within, dictatorships. In any such cases, more poverty alleviation means less democratization, and vice versa. It is possible to overcome this trade-off, however, if one can arouse the interest of dictatorial regimes to be less repressive towards their citizens. To accomplish this, development co-operation requires an appropriate framework. This article sketches an institutional arrangement that could contribute to this task. The underlying thesis is that this arrangement would be able to overcome the trade-off between poverty alleviation and democratization, and that democratic governments as well as dictators do have a common interest in implementing it.